New austerity proposal spurs strikes, protests in Greece

Greece: New austerity proposal spur strikes, protests

ATHENS – Greece’s government presented a new austerity package to parliament on Monday as a week of strikes and protests kicked off over proposals that lawmakers must approve if the country is to secure more aid and stave off bankruptcy.

Parliament is expected to vote on Prime Minister Antonis Samaras’s 13.5-billion euros (US$17-billion) package of cost cuts and tax hikes on Wednesday along with measures making it easier for firms to hire and fire workers.

Despite public exasperation at four years of belt-tightening that has helped wipe out a fifth of the economy and leave a quarter of Greeks jobless, the package and a tough budget slated for a vote on Sunday are expected to scrape through parliament.

Greece’s powerful main public and private sector unions will launch a 48 hour strike against the legislation on Tuesday and plan marches in the centre of Athens. Journalists, doctors, transport workers and shopkeepers also planned stoppages.

Approval of the reforms and the passage of the 2013 budget are crucial to unlocking 31.5-billion euros in aid from an International Monetary Fund and European Union bailout that has been on hold for months.

“These will be the last cuts in wages and pensions,” Samaras said in a speech aimed at galvanizing the members of his centre-right New Democracy party.

“We promised to avert the country’s exit from the euro and this is what we are doing. We have given absolute priority to this because if we do not achieve this everything else will be meaningless.”

Without the aid, Greece will not be able to redeem a 5- billion euro treasury bill falling due on November 16. The bulk of the new aid tranche, some 25-billion euros, is earmarked to recapitalize Greece’s struggling banks and kick-start moribund lending, a prerequisite to climbing out of recession.

But union leaders say the measures will simply deepen an economic contraction expected to run into next year.

“Our labour action next week will be part of efforts to avert policies that will sink the country deeper into recession and destroy the fabric of society,” Yannis Panagopoulos, head of the GSEE private sector umbrella union, told Reuters.

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The capital’s 14,000 taxi drivers are on strike and office workers complained of long commutes due to a halt on the city’s metro, tram and city trains, which serve 500,000 people a day.

Protests will intensify on Tuesday, ratcheting up pressure on coalition deputies whose parties have slid in polls since a June election in the Mediterranean country of 10 million.

On Friday, a poll showed New Democracy’s support had fallen to 22%, from 30% in the June election. Its Socialist PASOK partner had fallen to 7%, down from 12.3% according to the PULSE survey.

“Everything is black and it will only get worse. They have exterminated us. They have turned us into prisoners,” said Eleni Tatsou, 38, who works in a kebab shop in central Athens.

Everything is black and it will only get worse. They have exterminated us. They have turned us into prisoners

“I haven’t been paid for eight months, but I know nothing will change if I quit, so I’m waiting. Maybe I’ll get paid one day. Maybe a miracle will happen.”

The smallest party in the ruling coalition, the Democratic Left, has pledged to stay in government but rejects the plans to cut wages and severance payments and scrap automatic wage hikes, saying they will devastate workers who have borne the brunt of the crisis.

“We will not vote in favour of these measures,” Dimitris Hatzisokratis, a Democratic Left spokesman, told Reuters. “But we will support the budget, which means we are giving our vote of confidence to this government.”

PASOK is struggling to shore up support for the measures after one of its deputies quit on Thursday in the wake of a narrow victory in pushing through a privatization bill also demanded by the lenders, cutting PASOK’s numbers to 32 seats.

At least five of those members have said they may not back the reforms. Without them, New Democracy and PASOK’s remaining members are expected to muster around 154 of parliament’s 300 votes, a move analysts say is vital to the government’s survival and Greece avoiding insolvency later this month.

“The measures will pass, but the majority will be so slim that it will raise questions over the government’s future viability,” said Costas Panagopoulos, head of Alco pollsters.

Greece is hoping the “troika” of the IMF, European Commission and European Central Bank lenders extend a deadline to achieve a primary budget surplus of 4.5%, a measure of public finances minus debt maintenance costs.

That would give the battered economy breathing room, but the government has said it would shrink more than forecast in 2013 and debt would peak at 192% of GDP in 2014, 10 percentage points higher than earlier forecast.

That has increased the prospect of another round of debt restructuring, a source of conflict between the IMF and Greece’s biggest EU creditor Germany who both privately say the Greek debt trajectory is unsustainable.